The trucking industry is a vital part of the economy, keeping goods moving across the country. Almost every product we use has traveled by truck at some point. This makes it an essential sector that supports our daily lives and economic growth.
According to the Bureau of Labor Statistics, the median annual wage for heavy-duty truck drivers is $47,130. There are around two million heavy and tractor-trailer drivers in the U.S. as of 2020. The BLS predicts a 11% increase in demand for truck drivers from 2020 to 2030 as the economy expands.
While concerns about autonomous trucks exist, they are unlikely to fully replace human drivers anytime soon. Many believe that technology will complement rather than eliminate the need for skilled drivers. You can learn more about this trend here.
Trucking isn't just about long-haul tractor-trailers. It includes light and medium-duty vehicles too. Not all truckers work the same routes or hours. Understanding these differences can help you choose the right path for your business.
In 2021, the demand for truck drivers was high, with good freight rates. Many owner-operators were making solid profits. Industry experts suggest that the driver shortage is driving up rates, creating opportunities for new entrants.
Source: DOT FMSCA
The trucking industry is highly fragmented, with many small operators. Owner-operators make up about two-thirds of the total carriers, showing the potential for independent success in this field.
Source: DOT FMSCA and Equipment Radar
According to Bob Costello, Chief Economist of the American Trucking Associations (ATA), trucks move roughly three-quarters of the nation’s freight by weight. While shipping by container ships is often the cheapest, trucks are still the most common due to their flexibility and accessibility.
Freight often uses multiple transportation modes to reach its destination. Trucks are ideal for shorter distances, while ships and rail are better for longer hauls. Understanding these dynamics helps in planning efficient routes and operations.
Source: US Department of Transportation Bureau of Transportation Statistics
The Transportation Services Index (TSI) measures the volume of freight transportation services in the U.S. It reflects the overall demand for trucking and is closely tied to economic conditions.
Demand for trucking tends to rise during economic growth and fall during downturns. Understanding this cycle is crucial for long-term planning and financial stability.
Source: BTS
Economic cycles can impact your business significantly. When the economy is strong, demand for trucking rises. During recessions, it drops. Planning for these fluctuations is key to maintaining profitability.
Freight rates typically follow economic trends. Rates may increase when the economy grows and decrease during downturns. Having a plan for these changes ensures your business can adapt and survive.
Source: DAT Flatbed Rates
Every successful business starts with an idea. Many businesses begin small and grow with a solid plan and strategy. Jeff Bezos started Amazon from his garage, proving that big ideas can come from small beginnings.
To start a successful trucking business, you'll need:
A business plan is essential for guiding your trucking business from concept to success. It helps you outline your goals, strategies, and financial projections. Think of it as a roadmap for your journey.
Be realistic when drafting your plan. Overly optimistic assumptions can lead to poor decisions down the line. A well-thought-out business plan increases your chances of securing funding and achieving long-term success.
A business plan can be short or detailed, depending on your needs. It should cover key areas like company description, market analysis, competitive landscape, and financial projections.
Key components include:
All long-haul truck drivers must have a Commercial Driver’s License (CDL). Requirements vary by state but generally involve passing written and driving tests. Some states may deny CDLs if you have a history of suspension.
Additional endorsements allow you to transport specialized cargo, like hazardous materials. These require extra tests and background checks.
Federal regulations require CDL drivers to maintain a clean driving record, pass physical exams every two years, and undergo random drug and alcohol testing. Violations can lead to license suspension.
Register your business with the FMCSA to obtain a DOT MC Authority Number. This number tracks your compliance and safety records, and it determines the types of cargo you can transport.
You must also complete the MCS-150 and Safety Certification Application. Your application will be reviewed and posted for public comment before approval.
After obtaining your MC number, register with the UCR to validate your insurance coverage in all states where you operate.
The IRP plate allows you to operate in the U.S. and Canadian provinces. Annual fees are required to renew the license.
Trucks over 55,000 pounds must pay the Heavy Highway Use Tax. Complete Form 2290 annually with the IRS.
The IFTA permit allows you to file fuel tax returns quarterly in your registered state. Learn more about IFTA here.
Register an updated BOC-3 Form with the FMCSA. This designates a process agent for interstate operating authority.
Since 2017, the DOT requires ELDs to ensure compliance with federal hours of service regulations. Read more about the ELD mandate.
Starting a trucking business involves two main costs: start-up and operating. Creating a budget or spreadsheet helps estimate these figures. Be realistic and include a buffer for unexpected expenses.
Start-up costs include buying a truck, upgrades, registration, licenses, and training. Most businesses require $10,000 to $30,000 upfront. A new truck averages $140,000, while a used one costs around $60,000.
Due to supply chain issues, used truck prices have increased. However, many banks and manufacturers offer financing options, allowing you to buy a truck with little or no down payment.
Revenue is calculated based on per-mile rates. Factors like driving time, traffic, and deadhead mileage affect your earnings. Deadhead miles—unpaid travel—can reduce profit by up to 20%, so factor them into your calculations.
Operating costs include fuel, maintenance, tires, tolls, meals, insurance, lodging, and accounting. Fuel is the largest expense, with newer trucks offering better efficiency. Average fuel efficiency is around 6.2 miles per gallon.
Maintenance costs increase as the truck ages. Budget for these expenses and consider insurance to protect against unforeseen events. Also, account for bad debt, as some customers may not pay on time.
According to OOIDA's 2020 survey, the average owner-operator earns $190,000 annually, driving about 121,000 miles, with 26,000 being deadhead miles. Total expenses were $124,500, leaving a net profit of $65,500.
Expenses included:
Remember to account for taxes on your income. Depreciation can help reduce taxable profit, lowering your overall tax bill.
Unexpected events, like accidents or sudden rate changes, can impact your business. Build a budget cushion to cover these situations. Aim for three to six months of operating expenses as a safety net.
Insurance is crucial for protecting your business. Ensure you understand what your policy covers and what it doesn’t. Having proper coverage increases your chances of surviving tough times.
Planning ahead and having contingency plans improves your business's resilience. During downturns, those who prepare can benefit from higher rates when the market recovers.
Yes, starting a trucking business with no money is possible. However, you still need a source of capital for initial costs and operating expenses. Options include loans from family, friends, or banks.
You can finance your truck or lease it. Dealerships will review your credit and business plan before offering financing. Always keep extra capital for unexpected expenses.
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Starting A Successful Trucking Business Is Possible For Everybody
FMSCA Trucking Industry Registration Statistics
Trucking Industry By Carrier Size
Takeaway: Small owner-operators make up about two-thirds of the trucking industry.
Transportation Industry Statistics
Transportation Value Shipped By Modes & Mileage
Takeaway: Trucking (yellow) is the primary method of shipping in the U.S., representing 80% of goods under 100 miles and 50% between 1,500 and 2,000 miles. Data are as of 2018.
Transportation Services Index
Takeaway: Transportation Services Index follows GDP trends, showing cyclical patterns.
Be Aware Of The Cycle
Takeaway: Freight rates have risen over 25% since 2021, reflecting the economic rebound.
Getting Started With Only One Truck
Create A Business Plan
Getting Your Commercial Driver’s License
Other Legal Requirements & Regulations
US DOT Motor Carrier (MC) Authority Number
Unified Carrier Registration (UCR)
International Registration Plan (IRP) License Plate
Heavy Highway Use Tax Return (Form 2290)
International Fuel Tax Agreement (IFTA) Permit
BOC-3 Form
Electronic Logging Devices (ELD)
Understanding Start-Up Costs and Operating Profit / Expenses Of Trucking Businesses
Start-Up Costs
Revenue
Operating Costs
Average Industry Numbers
Importance Of Having A Budget Cushion
Can I Start My Business With No Money?
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